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What to know about the US moving to roll back Dodd-Frank financial regulations

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Updated: 10:27 AM CDT May 23, 2018

Congress has moved to roll back some key elements of a law that was installed to prevent recurrence of the 2008 financial crisis. The legislation needs the president’s signature and would dismantle a chunk of the rules framework for banks after the financial crisis resulted in millions of lost jobs and foreclosed homes. Congress voted Tuesday on changing the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. What’s changing? Backers of the legislation say it will spur the economy by increasing lending, easing the regulatory burden on small- and medium-sized banks. Critics argue it increases the chances of future taxpayer bailouts like the ones that followed the financial crisis. What does the new legislation do? The legislation raises the threshold at which banks are deemed so large that a failure would cause major damage to the wider economy. The bill makes a five-fold increase, to $250 billion, in the threshold of assets at which banks are deemed to pose a potential threat if they fail. The change would ease regulations and oversight on more than two dozen financial institutions, including BB&T Corp., SunTrust Banks, Fifth Third Bancorp and American Express. What’s the background? As the Great Recession economy stabilized, Congress shifted from economic stimulus and bailouts to establishing the kind of regulatory framework that might keep another Great Recession from happening. Dodd-Frank established a process wherein the federal government could break up and wind down a failing financial company whose failure threatens financial stability in the United States. Among other measures, it established a new agency with a mission of ensuring that banks and other financial companies don't abuse consumers. What will Trump do? President Donald Trump tweeted Wednesday that he will sign the legislation shortly. During his campaign, he repeatedly attacked the Dodd-Frank Act as a "disaster" that had crimped lending and stifled the economy's ability to grow by imposing burdensome regulations.

Congress has moved to roll back some key elements of a law that was installed to prevent recurrence of the 2008 financial crisis.

The legislation needs the president’s signature and would dismantle a chunk of the rules framework for banks after the financial crisis resulted in millions of lost jobs and foreclosed homes.

Backers of the legislation say it will spur the economy by increasing lending, easing the regulatory burden on small- and medium-sized banks. Critics argue it increases the chances of future taxpayer bailouts like the ones that followed the financial crisis.

What does the new legislation do?

The legislation raises the threshold at which banks are deemed so large that a failure would cause major damage to the wider economy. The bill makes a five-fold increase, to $250 billion, in the threshold of assets at which banks are deemed to pose a potential threat if they fail. The change would ease regulations and oversight on more than two dozen financial institutions, including BB&T Corp., SunTrust Banks, Fifth Third Bancorp and American Express.

What’s the background?

As the Great Recession economy stabilized, Congress shifted from economic stimulus and bailouts to establishing the kind of regulatory framework that might keep another Great Recession from happening.

Dodd-Frank established a process wherein the federal government could break up and wind down a failing financial company whose failure threatens financial stability in the United States. Among other measures, it established a new agency with a mission of ensuring that banks and other financial companies don't abuse consumers.

What will Trump do?

President Donald Trump tweeted Wednesday that he will sign the legislation shortly. During his campaign, he repeatedly attacked the Dodd-Frank Act as a "disaster" that had crimped lending and stifled the economy's ability to grow by imposing burdensome regulations.

Big legislation will be signed by me shortly. After many years, RIGHT TO TRY and big changes to DODD FRANK.